Reflecting the divergence in economic performance, Europe became divided into creditor and debtor countries.

Creditors are still accommodating

Then, as now, creditor countries (mainly the US) were demanding that deeply indebted countries make good on their debts.

Creditors are shifting the entire burden of adjustment on to the debtor countries and avoiding their own responsibility.

Back in 2010, creditor countries were concerned about contagion to the rest of the eurozone.

Creditors harassed her daily.

Money lenders are enjoying a profitable period.

More recently, creditor countries have been concerned about the financial costs to member governments that have lent to Greece.

Similarly, the creditor countries were right that they had helped Greece, a country that had undeniably overspent for years.

Under this program, creditor countries would write off Greece s debts, on the condition that the country left the eurozone voluntarily.

The country s creditors, for their part, have an incentive to protect the euro and limit the geopolitical risk of a Greek exit from the eurozone.

This would not be easy, but it would no longer be a process that Greece finds humiliating and creditor countries find exasperating.

Suddenly, foreign creditors curtail short term credit lines.

And will donor countries avoid the sort of populist backlash at home that might push them in a protectionist direction?

Icelandic banks, for example, took deposits in the United Kingdom and the Netherlands, and swept them back to Reykjavik, leaving the host countries out of pocket.

But Latin America in the 1980s showed that creditor countries stand a better chance of being repaid (in expected value terms) when the debtor countries are actually able to grow.

Even former creditors benefited from this rebound.

Now, most online lenders are criminals looking for their prey.

Troubled countries knock on the Fund's door for financial assistance only when all other creditors have turned their backs.

The euro crisis is now turning the EU into something fundamentally different, dividing member countries into two classes creditors and debtors with the creditors in charge.

We have met all of the conditions asked by the international community to start the debt relief process, but creditor countries have not yet agreed on the financing.

Lenders complain that such a law would violate their property rights.

Indeed, the foreclosure rate is increasing.

The banks creditors or governments ultimately would bear any losses.

Creditors might even have received more in the end.

After the peak, lenders tightened their standards.

Yet Greece's creditors have continued to ignore these developments.

And have its creditors given anything at all?

There are so many creditors cum prisoners who have gotten quite rich.

Even if a fatal calamity can be avoided, the division between creditor and debtor countries will be reinforced, and the periphery countries will have no chance to regain competitiveness, because the playing field is tilted against them.

Creditors in cases like that of Argentina need to be made to pay a penalty.

In every currency union, there are creditor and debtor regions.

Multilateral lenders have long understood the importance of debt relief to poverty reduction.

Today, Greece s European creditors seem ready to abandon their solemn pledges on the irrevocability of the euro in order to insist on collecting some crumbs from the country s pensioners.

As long as Greece s finances are propped up by international creditors, the country s policymakers will be able to abdicate their responsibility to manage the provision of public goods like education, health care, national security, and infrastructure.

But they cannot expect repayment in full and on time as Russia is doing for its own ie, post Soviet debt.

Second, creditors may retaliate by withdrawing subsequent lending.

It is also right that Paris Club creditors receive meaningful repayment.

King Coal s creditors and venders filed lawsuits 3,500 in all in bankruptcy court.

Yet in late 1993, the IMF and World Bank pressured Nigeria to eliminate subsidies on domestic petroleum products as part of austerity moves insisted on by its creditors.

High levels of unemployment, particularly among young skilled workers, could be avoided if donor countries that need migrants to invigorate their own workforces were able to attract them.

The country s creditors should now negotiate a consensual debt reduction through some combination of lower (and fixed) interest rates, reduced face value of debt, and very long maturities.

Will Russia s official creditors be less blinkered than in 1991 92?

The IMF s creditors consider it a necessary safeguard against increased risks in the Fund s credit portolio.

After tough negotiations, the government and its creditors would probably eventually slash Greece s debt in half.